The online hub of the Missouri School Administrators Coalition.

Bulletin #1: 2014 Session Begins: Tax Cuts, School Transfers to Top Agenda


The 2014 Legislative session kicked off last Wednesday as both the House and the Senate convened. Leaders in both the House and the Senate discussed their priorities for the coming session. In his speech to his colleagues, Speaker Tim Jones (R – Eureka) stated that tax cuts, education reform and protecting the rights of students in unaccredited districts to transfer to surrounding districts were top priorities. In the Senate, President Pro-tem Tom Dempsey (R – St. Charles) echoed many of those same sentiments only failed to go as far as to state his position on the school transfer law. While the transfer issue will likely be the top priority for the Senate, its leaders have not taken any position on what should or should not be included or excluded in the legislation. Sen. Dempsey also noted the need to tax cuts, providing education funding to K-12 and higher education, and campaign finance and ethics reform.

While last week was significantly quiet as the pomp and circumstance took place, the pace will likely speed up this week as many priority pieces of legislation begin to have committee hearings in the coming days.

Student Transfer Law to Receive Intense Scrutiny, Fixes Face Uncertain Future

Leaders in both chambers of the Missouri General Assembly made the student transfer issue a top priority in the opening moments of the 2014 session. Thus far numerous bills have been filed from legislators all over the state and on both sides of the political aisle. The proposals are numerous and quite varied.

Many plans seek to limit the number of transfers to those students attending unaccredited school buildings within unaccredited school districts. Also, several plans offer guidance for districts that receive transfer students so that they may set reasonable class size limits. Lastly, most plans also require full tuition to be paid by the struggling school district.

This last point is likely the issue that is going to receive the most scrutiny as charging full tuition is likely to lead to the bankruptcy of the unaccredited district. Conversely, placing a cap on the tuition amount is likely to be met with severe criticism from communities surrounding an unaccredited district because they would be, in effect, subsidizing students from outside of their school district to attend while at the same time increasing class sizes for resident students.

Over the last several weeks, the Missouri Association of School Administrators have been promoting a plan to fix the transfer situation by putting a halt to transfers and instead offering meaningful support, intervention and reform in struggling school districts in order to give their community schools the opportunity to turn around. If those changes fail to work, then the district would be lapsed and schools would be attached to another district. The MASA plan can also be implemented with out legislation.

Today, another plan will be presented to the State Board of Education that was paid for by the Kaufman Foundation in Kansas City. The plan was developed and will be presented by CEE-Trust, an organization based in Indianapolis. It is expected to have numerous recommendations focusing on increasing the number of charter schools in low performing school districts, especially Kansas City.

This issue is set to receive a large amount of debate in both bodies. However, many details need to be worked out in how a legislative fix should be crafted.

Still, if a bill is crafted to address several concerns that have been expressed here, Speaker of the House Tim Jones stated last week that he would do everything he could to defeat the bill unless his ideas of school reform were attached to it.

If nothing is done to address the issue legislatively, two scenarios are likely: 1. The transfer law continues and districts classified as unaccredited will be forced into bankruptcy within a few months. 2. The State Board of Education and DESE move to address the situation administratively.

This will be a top priority for SAC in 2014 and we will attempt to keep you informed in these bulletins as the issues progress.

Tax Cuts to Be Emphasis in 2014

Despite the debate and ultimate failure of HB 253 over the summer of 2013, the topic of tax cuts is not likely to diminish in 2014. It is expected that both chambers of the General Assembly will move tax reform bills in the coming weeks. It is expected that some lawmakers, particularly in the House of Representatives, will attempt to reduce the cost of HB 253 to a level that is more reasonable and does not have as dramatic effect on state revenues. Rep. TJ Berry (R – Kearney), the sponsor of last year’s HB 253 have filed HB 1253 and HB 1254 that focuses tax cuts on pass through businesses like LLC’s and has a stated goal of keeping the cost between $100 -$200 million. Meanwhile in the Senate, Sen. Will Kraus (Lee’s Summit) and Sen. Eric Schmitt (R – Glendale) have both filed tax cut bills that are very similar to HB 253, with Kraus’s bill exceeding the $800 million price tag of last year’s bill.

All of these proposals must be vetted to ensure that the price tags do not harm the state’s ability to adequately fund Missouri schools. If you remember, last year’s bill included several mistakes that not only raised the cost of the bill but also raised taxes on things like prescription drugs and college textbooks.

If no tax cut is passed this session, it is likely that proponents, including Rex Sinquefield, the Missouri Chamber of Commerce, and Associated Industries of Missouri, could pursue a ballot initiative that would go to a vote of the people and avoid the legislative process.

Along with the school transfer issue, the tax cut debate will be a major focus of SAC this year and we will keep you up to date right here with the latest. 

Budget Update

The Missouri State Fiscal Year 2015 Budget will soon undergo the drafting process and will begin with a positive outlook as the State’s revenue figures continue to climb. After numerous years of making harsh cuts, the House and Senate budget crafters will be forced to determine whether or not some State funded programs merit increases. This includes education funding. As you recall, late last year Governor Jay Nixon stated his intention to fully fund Missouri school funding formula by the end of his term as Governor. This means the Governor has three years to fulfill this promise. With the formula currently underfunded by nearly $600 million, we expect that the Governor will attempt to make a significant “down payment” this year to meet his stated goal.

The whole process will begin with the Governor's State of the State Address on January 21st, at 7 p.m. in the House Chamber. The address will outline the Governor's budgetary and legislative priorities for the current session.

Even though the State’s revenue figures continue to grow, the State’s budget leaders did not get off to a good start last month as the Governor Jay Nixon, Senate Appropriations Committee Chairman Sen. Kurt Schaefer (R – Columbia), and House Budget Committee Chairman Rep. Rick Stream (R – Kirkwood) were unable to reach an agreement on just how much the state will have in revenues to spend. The Consensus Revenue Estimate (CRE) is a joint process between the Governor, the House and the Senate that has been used for years to project general revenue collection to assist the Governor and General Assembly in developing a balanced state budget. The House and Senate budget leaders have agreed to write the State operating budget using 4.2% CRE, which was the figure that was originally agreed to by all parties. Governor Nixon's proposed budget will likely be based on a higher CRE.

Another major piece of the state budget to watch is in regards to testing. Missouri’s testing contract is set to expire at the end of this year. With any new contract, the cost is likely to go up from the $15 million in annual cost that the state has spent the last several years. The initial budget request from DESE asked for an overall testing appropriation of $30 to pay for multiple new features in a new testing contract including:

1. Increased number of tests in high school. (more end-of-course and more end-of-high school exams)
2. A move for all tests from third grade to high school to be performed online.
3. A formative and interim assessment system for all school districts that includes test banks and a digital library that can be used to assist teachers with instruction.
4. Membership fees to the Smarter Balanced Consortium.

Many education organizations raised initial concerns in regards to testing. Both in the amount students would be tested but also in the way they were tested. Many schools expressed extreme frustration with having the space, hardware, or broadband capabilities to fully implement the new testing requirement. Because of this, please be looking for a new proposal to be submitted from DESE in the coming weeks that addresses the testing concerns that have been raised from the education community.

The State’s estimated $25 billion budget must be passed, per the Missouri Constitution, by May 9th and will go into effect on July 1, 2014.

You may review the content of the DESE budget request as well as any other state department by clicking on the following link:

http://content.oa.mo.gov/budget-planning/budget-information/2015-budget-information/department-budget-requests